From sustainability to speed – The opportunity upfront Material Information brings for Estate Agents could be the biggest in a decade

From sustainability to speed – The opportunity upfront Material Information brings for Estate Agents could be the biggest in a decade.

With Parts B and C of Material Information guidance on the horizon, iamproperty brought experts Beth Rudolf, Director of Delivery at The Conveyancing Association and Paul Offley, Group Compliance Officer at nurtur.group together, to discuss the opportunity upfront Material Information brings for agents. 

Beth and Paul kicked off the session with a clear view that the industry and agents should move away from seeing the collection of Material Information as a burden, and instead look at the huge opportunity that exists if collectively we get this right.

So why should agents jump in with both feet?

“We know it works already, you only have to look at auction and other territories to see the potential.”

Beth showcased the success that bringing more information upfront has already had for the industry, adding:

“The benefits are massive, not just in financial terms with increased pipeline turn and time and money saved, but in driving a faster, more efficient, and less stressful process for everyone.

“We only need to look at Scotland to see that upfront information is a huge success; it has reduced their fall through rate by 60% compared to England and Wales.

“Or we can look to Norway to see the positive impact it has, by the agents gathering all information upfront for potential buyers, speeding up the process, delighting their clients and increasing their fees.”

Paul added:

“Auction is another great example to showcase the benefits that upfront information can have on fall through rates and the speed to completion.

“If it can work for auction there is no reason why the same principles can’t work as best practice in Private Treaty, to give buyers more information to help them make informed decisions and give sellers the confidence that they are sale ready.”

“There are myths we need to bust.”

Addressing the need to bust the myths, they discussed agent concerns that more information upfront may put buyers off.

Beth added:

“Agents are so savvy, they sell houses all of the time that may have cosmetic flaws or potential downfalls, but they use their networks and skill to help find buyers a bargain and get the best deals for sellers. It’s exactly the same with Material Information.

“The more information they have at their fingertips, the more chance they have of finding the right buyer, not a buyer that will want to renegotiate as soon as they have all the facts and add weeks to the already tedious process.”

Paul added:

“There are also concerns it will put sellers off, but in current market conditions where dis instruction rates are sitting at about 40% in England and Wales, finding ways to make a client ‘more sticky’ has to be a positive.

“Once they have invested in handing over all of the Material Facts to an agent they are less likely to move to another agent at the first hurdle.”

Beth said:

“We see this working in practice in Scotland, the Home Report shows that Material Information regulation has had no impact on the number of properties going on the market but has reduced the number of fall throughs by 60%, which of course will naturally reduce the number of dis instructions.”

“It’s the perfect chance to change the consumer mindset.”

The panel discussed the recent research from iamproperty and MMC which highlights the big frustrations for vendors selling their home. Speed unsurprisingly hit the top spot with 50% saying that the process takes too long. Buyers dropping out came in a close second causing frustration for 41%. Agents’ frustrations were similar, with 80% finding the process increasingly slow, in particular with conveyancing. 70% put buyer drop out and high fall through rates in second place.

Beth said:

“It’s the perfect time to change the consumer mindset when it comes to pulling out of a sale.

“Recent research showed that buyers feel comfortable to pull out because they don’t have all the information when they make their offer.

“When they do get it and feel they can make a more informed decision they don’t hesitate to back out or renegotiate.

“Bringing Material Information upfront should help to reduce fall through and change this mindset that making an offer on a home isn’t as big a commitment.

“It’s a buyers’ market and so it should also help sellers to present their homes in the best possible way to make it attractive to the right buyers.”

Paul added:

“It’s not like HIPs or regulation filled with technical information, this is consumer driven so should give agents the opportunity to stand out, delight their clients, win more instructions, get properties sold faster and ultimately get paid quicker.”

“There is a new conversation too – sustainable transactions.”

The carbon footprint of the property industry is huge and so it’s no surprise to see the environmental pledges coming in thick and fast from agents, with paperless transactions, community initiatives and green policies at the heart.

Paul said:

“There has been a real shift, with sustainability coming into more and more conversations with agents in recent months.

“It’s a big factor for consumers too, which could impact instructions in the future as clients choose to work with an agent doing their bit.

“Material Information earlier in the process could help agents to accelerate their ESG policies and improve their carbon footprint.

“As a starting point if every agent could cut back on the number of wasted miles showing buyers around houses that ultimately aren’t suitable, the impact in the UK would be huge.”

“Best practice or enforced?”

Beth said:

“Whilst it will become enforced, likely with unlimited fines and even prison sentences, I’m hopeful that agents will see beyond a tick box admin exercise and be guided to best practice by the benefits to them and their business.

“Those who don’t build this into their processes and see the potential will likely punish themselves in the long run anyway.

“Not making the shift will see agents continue to average their two pipeline turns a year and battle a 30% plus fall through rate, as well as wasting hours of valuable time on all of the additional progression points over a 22-week period.

“Digitalisation of property data is really taking foot now and so this feels like the right time to drive change and start this transition.

“It’s about making it as easy as possible for agents and a solution like iamproperty movebutler will help agents to stay compliant at every stage.”

“This could allow agents to charge higher fees.”

Beth said:

“If we take the Nordics as an example, agents are able to position themselves as a higher value partner to clients, as realtors, they have fees structures much higher than standard UK fees.

“As well as valuation information they gather legal information and standard property facts, they can advise clients with all the information, help them to make informed decisions and have the time to seek out the best properties for their clients to drive their pipeline.

“Material Information success in the UK will offer agents the opportunity to take the hours saved and use it to provide an even better service for their clients and in time increase their fees but if nothing else, it reduces offer to exchange by 10 weeks on average in pilot.

“That’s 10 weeks less chasing progress updates for everyone – that has to be an FTE salary saved.”

Paul added:

“It’s a competitive fees market, but we’ve seen agents take the leap and charge for services like AML to accommodate for digital services which automate or speed up the process. Consumers aren’t shying away, we’re used to paying for a premium service.”

Whilst some of the details of parts B and C are still unknown until summer 2023, Beth and Paul have urged agents to jump in with both feet. Agents should explore their options and find the right solution for them to be able to effectively deliver on parts A, B and C and grab this opportunity to drive real positive change for their business and the UK housing market.

Ben Ridgway, Co-Founder of iamproperty, said:

“We’re committed to supporting agents in the best way we can and bringing experts together to discuss the big things happening in our industry is just part of that.

“Our Partner Agents have our full support as they navigate this next stage of Material Information guidance and to take advantage of the opportunities it brings.”

 

iamproperty has launched a Material Information Hub to help agents prepare, including expert insights around the opportunity that upfront Material Information brings.

 

Kindly shared by iamproperty

Main article photo courtesy of Pixabay